Professional Documents
Culture Documents
Week 5 - Global Business Strategy Case - BMW at 100
Week 5 - Global Business Strategy Case - BMW at 100
Week 5 - Global Business Strategy Case - BMW at 100
GLOBAL BUSINESS
STRATEGY
Student Participation
Lima – Peru
2023
Integrative Case 13
Carlsberg in Russia
- Weak rule of law - The legal system in Russia is perceived as weak and subject to
political influence. There are concerns about property rights, contract
enforcement, and fair treatment of foreign investors.
2. Despite the political risk, why do foreign multinationals such as Carlsberg eager to invest
in Russia?
- Weak rule of law - The legal system in Russia is perceived as weak and subject to
political influence. There are concerns about property rights, contract
enforcement, and fair treatment of foreign investors.
If I were a Carlsberg board member, I would be hesitant to vote "yes" on acquiring a new
brewery in Russia at this time based on the following considerations:
- The Russian beer market is declining: Due to economic recession and laws
restricting alcohol sales, the overall beer market has been shrinking in recent
years. Expanding production capacity now seems risky.
- Currency risk: With the ruble devaluation, Carlsberg's revenues in Russia are
worth much less in euros. Further currency fluctuations could seriously impact
profitability.
- Input costs could rise: With a devalued currency, imported production equipment
and materials will be more expensive, hurting profit margins.